Advances in Economics, Business and Management Research, volume 174

Proceedings of the Ninth International Conference on Entrepreneurship

and Business Management (ICEBM 2020)

A New Conceptual Framework for Business Model

Analysis
Chin-Chiuan Lin1*, Wei-Ting Yvonne Foung2,3
1
Department of Business Administration, Kun Shan University, Tainan, Taiwan
2
Chairman of ECAIC Integrated Consulting Co., Ltd., Taichung, Taiwan
3
Institute of Human Resource Management, National Sun Yat-Sen University, Kaohsiung, Taiwan
*
Corresponding author. Email: cclin@mail.ksu.edu.tw

ABSTRACT
The present study proposed a new conceptual framework (supply-interface-demand, SID) for analysing a
business model. The new conceptual framework analysed the business model from the demand side of the
customer to the supply side of the suppliers, and the transaction interface was also analysed. The SID framework
not only can analyse the existing business model, but also can develop a new business model for the enterprises
based on the problem improvement of the existing business model. The present study also conducted taxi
business as the sample to illustrate the analysis of existing business model and to develop a new business model.
Keywords: Conceptual framework, Business model, Supply-interface-demand

1. INTRODUCTION reflects the choice strategy for achieving the company’s

Whether for a century-old or a new start-up enterprise, the
business model is the critical factor to the success of the
enterprises. Groesser and Jovy [1] proposed that it doesn’t
matter whether the company is a small or a global
enterprise, the business model is regarded as the most
important part of the company. Therefore, many researches
[2][3][4][5] have focused on analysing the business model.
Shafer et al. [6] reviewed the definition of business model
and suggested that business model represents the basic core
of logic and strategic choice of the companies to create and
obtain value in the network. Therefore, the business model
management goals in the market competition [7].
For business model analysis, Johnson et al. [2] proposed a
theoretical model to analyse the basic business model
(Figure 1), which includes the interaction between key
processes, key activities, and profit models, and the mutual
promotion of customers’ value orientation. Furthermore,
the key resources are assets, personnel, technology,
products, facilities, sales channels, and brands. These assets
can provide a value proposition for target customers.
The customer value proposition and profit model
respectively define the value of the customer and the
company; key resources and key processes also describe
how to create value for the customers and the company [2].

Key
processes

Customers’ value
Key Profit
activities models

Figure 1 Theoretical model of the basic business model [2]

Osterwalder & Pigneur [3] proposed a nine building blocks The nine building blocks are described as follow:
(Figure 2) that describes the business model rationale on (1). Customer segment: The organization serves one or
how an organization creates, delivers, and captures the several customer groups.
business values.

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 Advances in Economics, Business and Management Research, volume 174
(2). Value proposition: It is committed to solve the
customers’ problems and satisfy the customers’ needs
through a value proposition.
(3). Channel: The value proposition is delivered to
customers by communication, distribution, and sales
channels.
(4). Customer relationship: Establish and maintain
customer relationships with each customer group.
(5). Revenue stream: The source of income comes from
the value proposition successfully provided to
customers.
Key partners Key activities (KA) Value proposition
(KP) Key resources (KR) (VP)
Cost structure (CS)
Figure 2 The nine building blocks of business model analysis architecture
Osterwalder & Pigneur [3] also pointed out seven aspects of
business model innovation: senior managers, intrapreneurs,
entrepreneurs, investors, consultants, designers and serious
entrepreneurs.
(1). Senior executive: Build new business models in old
industries.
(2). Intrapreneur: Help develop the latest technology
through the right business model.
(3). Entrepreneur: Solve unsatisfied customers’ needs and
build new business models around them.
(4). Investor: Invest in companies with the most
competitive business models.
(5). Consultant: Help customers question their business
models, imagine and establish new business models.
(6). Designer: Find a suitable business model to launch
innovative products.
(7). Conscientious entrepreneur: Bring positive social and
economic changes through innovative business
models.
Afuah [8] provided a relatively simple visualization
method, of which the content of the model is customers’
value proposition, resources and activities, market
segmentation, growth model, and revenue model.
Afuah [8] also investigated how organizations use
innovation in business models to take advantage of the
following entrepreneurial opportunities: crowdsourcing and
open innovation, long tails, social media, disruptive
technologies, less innovation, network effects, and the lack
of complementary capabilities.
Latora et al. [9] proposed a decision support tool, which can
modify the AHP process for value model level analysis
based on nine building blocks for business model analysis
[3].
For start-up business model analysis, Foss and Saebi [5]
engaged in business model innovation and further research,
such as sustainability, open innovation, and dynamic
capabilities, and start-up companies must address important
survival conditions, which is a viable business model [10].
Slávik [10] pointed out that understanding the structure of
(6). Key resource: The key resources are the assets needed
to provide and deliver the above elements.
(7). Key activities: These are the most important measures
the company must take.
(8). Key partnership: Some activities are outsourced and
some resources are obtained inside the company.
(9). Cost structure: Business model elements lead to cost
structure.
Customer relationship (CR) Customer segments
Channels (CH) (CS)
Revenue stream (RS)
business model and its impact on the business performance
of start-ups may increase their likelihood of survival.
Fritsch & Wyrwich [11] represented in the context of
regional knowledge and corporate culture, and explored
emerging companies.
Koch [12] noted that in the IT start-up model, its efficiency
depends on scarcity and personalization. When starting a
new business, any entrepreneurial behaviour means
choosing a business model [5]. However, they did not
clarify the structure and consequences of the start-up
business model.
Osterwalder et al. [4] indicated that the business model
canvas can help you create value for your business, and the
value proposition canvas can help you create value for your
customers. When setting up a new venture, Osterwalder et
al. [4] further pointed out the main challenges and
opportunities faced by new enterprises as follows: provide
evidence that your ideas can be run within a limited budget;
manage investor participation; the risk of no money before;
find the right value proposition and business model; the
main opportunity to use rapid decision-making and agility
to gain advantage; use ownership motivation as the driving
force of success. What followed then was a start-up
company that continued to work hard to confirm its
existence and operated under very limited and dramatic
conditions, and the expected result was that the product was
accepted by the market and brought huge returns to
investors.
Slávik [10] analysed the business phase in the development
phase of the model through the nine building blocks
proposed by Osterwalder & Pigneur [3], and pointed out
that with the improvement of entrepreneurial thinking, the
business model has improved its development level.
Business model innovation (BMI) by treating business
models as variables rather than constants, is possible to
provide established companies with possible returns on
competitive profit levels [13].
Trapp et al. [14] also defined BMI as the process of
integrating new business logic into established companies
to improve profitability or take advantage of new business
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 Advances in Economics, Business and Management Research, volume 174
opportunities. However, compared with business model
upgrades or specific product innovations, existing research
has limited understanding of BMI.
Trapp et al. [14] also developed a BMI identification tool
and outlined the essence of the business model according to
the definition of management science, which will be
valuable to enterprise innovation managers and provide
suggestions on how to strengthen the innovations.
Furthermore, Euchner and Ganguly [15] pointed out that
business model is not only a mean for an enterprise to create
and obtain customers’ value, but also focuses on creating
customers’ value by considering the competitive advantage.
Otherwise, it will make the enterprise vulnerable to profit
Supply Interface
Who Cash flow
When Information flow
Where Intermedium
What Service provision
Why Guarantee
How Interactive
How much Etc.
Figure 3 Supply-interface-demand framework for business model analysis
2.2. Description of Supply-Interface-Demand
From the perspective of consumers, consumption is
triggered by consumers’ demand. The supply side,
transaction interface and demand side for business model
analysis consideration is described below:
Supply side: Generally, we can analyse the supply side by
who, when, where, what, why, how, and how much.
The taxi driver provides the taxi and service to the
consumers. The provided service duration depends on
the drivers' available time.
Transaction interface: The transaction interface analysis
items generally includes cash flow, information flow,
intermedium, service provision, guarantee, interactive,
…etc.
Demand side: We also can analyse the supply side by who,
when, where, what, why, how, and how much. The
people when they need to move to another place, they
will start their demand of taxi services.
3. EXAMPLE OF ANALYZING A TAXI’S
BUSINESS MODEL
The present study takes the taxi operation business model in
Taiwan as a sample to illustrate the SID framework from
the formerly Taxi Business Model A (about 50 years ago,
Table 1) to advance to present Taxi Business Model D
(present day, Table 4). Furthermore, the present study also
tried to develop the future Taxi Business Model E (Table 5)
based on the analysis from Model A to Model D.
erosion and weak growth. Therefore, this research
attempted to establish a new conceptual framework to
analyse the business models based on enterprise-level
supply, transaction interfaces, and customers’ needs.
2. LITERATURE REVIEW
2.1. Framework of Supply-Interface-Demand
Figure 3 shows the conceptual framework of supply-
interface-demand (SID) for business model analysis which
is proposed by the present study.
Demand
Who
When
Where
What
Why
How
How much
3.1. Taxi Business Model A (Formerly)
Table 1 shows the SID analysis of formerly Taxi Operation
Business Model A and the scenario, supply side (taxi driver)
problem, interface and demand side (customer) problem in
this model are shown as follows:
Existing business model: Formerly Taxi Business Model A.
Scenario: The taxi drivers drove the car around on the street
and waiting for passengers to wave their hand to call
the taxi service.
Supply side (taxi driver) problem: The taxi driver might be
taking long time to find a customer, and further, the
taxi driver might not find a customer during all day.
Furthermore, the taxi driver’s gas fee cannot be
recovered and gets no income.
Interface problem: (1) The information flow is the
customers wave their hand, if the taxi drivers doesn’t
see and no taxi around the customers, the customers
cannot get taxi service. (2) Passengers might encounter
bad drivers, and drivers might also encounter bad
passengers, there is no guarantee for both parties. (3)
The cash flow is pay cash, this might have some
problems along the way, such as: counterfeit money
and robbery. (4) The service provision type is passive.
(5) There is time limit for supply and demand side of
the transaction.
Demand side (customer) problem: The customers
(passenger) might wait for a long time to find a taxi,
and further, the customers might not find a taxi during
all day.
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Table 1 SID Analysis of Taxi Business Model A (Formerly)

Supply Interface Demand
Who Taxi driver Cash flow Pay cash Who General customer
When Day-time Information flow Wave hand When Day-time
Where On the street Intermedium Eye Where On the street
What Taxi Service provision Passive What Transportation
Guarantee No How Taxi
Interactive Direct

3.2. Taxi Business Model B (Advanced
Formerly)
The Taxi Business Model B solves the problem of taxi
business model A that the taxi driver might not find a
customer for all day and the customers might not find a taxi
for all day. Table 2 shows the SID analysis of Taxi Business
Model B and the scenario, supply side (taxi driver) problem,
and interface problem in this model are shown as follows:
Existing business model: Former Taxi Business Model A +
Taxi Business Model B.
Scenario: The taxi drivers are waiting at the train station,
airport and hospital etc. When the customers go out
from the train station, airport, and hospital, they can
take the taxi service immediately. This can solve the
problems between the taxi drivers and customers. The
train station, airport, and hospital, are the business flow
platform for taxi drivers and customers.
Interface problem: (1) Passengers might encounter bad
drivers, and drivers might also encounter bad
passengers. There is no guarantee for both parties. (2)
The cash flow is pay cash, this might have some
problems along the way, such as: counterfeit money
and robbery. (3) The service provision type is still
passive. (4) There is time limit for supply and demand
of transaction.
Demand side (customer) problem: If the customers are not
in the business flow platform, they also might not find
a taxi during all day.

Table 2 SID Analysis of Taxi Business Model B (Advance Formerly)

Supply Interface Demand

Who Taxi driver Cash flow Pay cash Who General customer
When Day-time Information flow Wave hand When Day-time
Where Fixed place + on the street Intermedium Eye Where Fixed place + on the street
What Taxi Service provision Passive What Transportation
Guarantee No How Taxi
Interactive Direct

3.3. Taxi Business Model C (Present)
The Taxi Business Model C solves the problem of Taxi
Business Model B if the customers are not at the taxi station.
Table 3 shows the SID analysis of Taxi Business Model C
and the scenario and interface problem in this model are
shown as follows:
Existing business model: Taxi Business Model B + Taxi
Business Model C, while the Taxi Business Model A
is die-out.
Scenario: When the customers need a taxi, they call to the
taxi company and tell the designated place, the taxi
company then broadcasts it to the taxi drivers to
request respond by radio. After taxi driver has
responded, the taxi company than send feedback about
the taxi number and arrival time to the customer. This
way can improve the safety for both taxi drivers and
customers, because the taxi company has the transition
records. The taxi company is equivalent to be the third-
party guarantor.
Interface problem: (1) The service provision type is also
passive. (2) There is a need regarding clear address of
designated place. If the customers cannot describe the
clear address, then the taxi drivers cannot provide taxi
service.
Demand side (customer) problem: If the customers are not
at the taxi station and do not have a clear address, the
customers also might not find a taxi for all day.

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Table 3 SID Analysis of Taxi Business Model C (Present)

Supply Interface Demand

Who Taxi driver Cash flow Cash or card Who General customer
When 24 hours Information flow Telephone When 24 hours
Where Designated place Intermedium Taxi company Where Designated place
What Taxi Service provision Passive What Transportation
Guarantee Yes How Taxi
Interactive Indirect

3.4. Taxi Business Model D (Advanced Present:
Uber)
In 2014, Damodaran [16] found that Uber had released the
App on which consumers can submit their request for taxis,
which is then the Uber will transfer the service demand to
the contracted private car owner. And then these private car
owners take orders and provide taxi services.
The Taxi Business Model D solves the problem of the Taxi
Business Model C if the customers do not have a clear
address. Table 5 shows the SID analysis of Taxi Business
Model D and the scenario and interface problem in this
model are shown as follows:
Existing business model: Taxi Business Model B + Taxi
Business Model C + Taxi Business Model D.
Scenario: When the customers need a taxi, they open the
App on their cell phone to request the taxi. The
manager of the App then transfers the information
(customers’ position) to their taxi drivers. The
available taxi drivers then response and take the order,
and then the responded taxi driver's information is
replied to the customers. The taxi driver then picks the
customers according to the GPS information.
Interface problem: (1) The service provision type is also
passive. (2) When the general public apply to provide
the service and apply the transportation demand in the
App, it is unable to verify the applicants in order to
ensure the customers’ safety.
However, the Taxi Business Model D solves many
problems for customers and taxi drivers, such as: cash
flow, information flow, and service provision.

Table 4 SID Analysis of Taxi Business Model D (Advanced Present: Uber)

Supply Interface Demand

Who General public Cash flow Online Who General customer
When 24 hours Information flow App When 24 hours
Where GPS coordinate Intermedium App manager Where GPS coordinate
What General car Service provision Passive What Transportation
Guarantee Half How General car
Interactive Indirect

3.5. Taxi Business Model E (Future)
The main emphasis and spirit of Taxi Business Model E is
to provide the services proactively. Table 5 shows the SID
analysis of Taxi Business Model E and the scenarios of taxi
business in this model are shown as follows:
Existing business model: Taxi Business Model E provides
proactive provision service to increase business
opportunities.
Scenario: When the customers have requested the taxi
several times, the APP manager then has the
customers’ information for analyzing the customers'
behavior. Then the APP manager can proactively
remind the customers if they need a taxi service. If the
customers’ responses are positive, then the APP
manager then assigns the taxi which is near the
customers.
Interface problem: The safe guarantee of both customers
and taxi drivers are still a problem.
However, the Taxi Business Model E improves the type of
service provision is form passive to proactive which
can increase the transaction opportunities and
customers’ convenience.

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Table 5 SID Analysis of Taxi Business Model E (Future)

Supply Interface Demand

Who General public Cash flow Online Who General customer
When 24 hours Information flow App When 24 hours
Where GPS coordinate Intermedium App Where GPS coordinate
What General car Service provision Proactive What Transportation
Guarantee Yes How General car
Interactive Indirect

4. CONCLUSION [7] S. Nenonen, K. Storbacka, Business model design:

The present study used the Taxi Business Model as a sample
to illustrate the SID framework from the formerly Taxi
Business Model A to advanced present Taxi Business
Model D. Furthermore, the present study also developed the
future Taxi Business Model E according to the problem
analysis of the previous models.
The results indicate that the SID framework which is
proposed by the present study cannot only analyze the
existing business models, but can also develop new business
models for enterprises on the basis of improving the existing
business model problems.
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